China bank to study loan possibilities for rice

China bank to study loan possibilities for rice

Delegates from the Import-Export Bank of China will visit Cambodia next week to discuss loans for the rice-processing and exporting sector, according to government officials.

Son Kunthor, president of the state-owned Cambodian Rural Development Bank, said yesterday that Chinese delegates will come to study the feasibility of providing loans to private investors to improve Cambodia’s rice processing.

“We are currently negotiating and next week they will come to Cambodia to discuss the matter further,” he said, adding that the negotiations were far from final.

During their tour of Cambodia, the Chinese delegates are likely to visit the provinces where there are rice mills, he said.

The mills would be the same mills to which he led Cambodian business delegates in late May, as part of presentations to attract loans.

Cambodia’s rice millers needed about US$200 million in investments, he added.

The two sides have been unable to reach an agreement. The Chinese bank officials wanted the Cambodian government to insure the private loans, while the government did not see this as its responsibility, Son said.

Loan interest rates from China are usually between 1 and 2 per cent annually, much cheaper than those offered by the Cambodian Rural Development Bank’s rate of seven per cent annually, he said.

Phou Puy, president of the Federation of Rice Millers Associations and the Baitong Rice Export Company, could not be reached for a comment yesterday.

Earlier this year, however, he told the Post the federation was working closely with the government to receive the loans for improving the capacities of rice mills in Cambodia, in a push to export more rice.

No one from the Import-Export Bank of China could be reached for a comment.

The push for increased exports is a new policy of Prime Minister Hun Sen’s and aims to export one million tonnes of rice next year.

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